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Week eighteen of the first biennium of the 105th Legislature consisted of days 74 through 77 of this 90-day session.
On Tuesday the Legislature debated and unfortunately did not advance LB 461, the tax reform package introduced in the Revenue Committee by Senator Smith and me at the request of Governor Ricketts. This legislation was a combination of property tax reform for agricultural producers, as well as income and corporate tax relief – tied to revenue triggers – for all working Nebraskans. There was a lot of confusion on the floor of the Legislature about the revenue triggers utilized in the bill. The way the triggers would have worked was by economic forecasting. The Tax Rate Review Committee meets in November and would have examined the expected rate of growth in net General Fund receipts from the current fiscal year to the upcoming fiscal year, as determined by the Nebraska Economic Forecasting Advisory Board, and if the expected rate of growth in receipts is at least 3.5 percent – including the tax relief set to take place – for the upcoming fiscal year, then small incremental tax relief would have been implemented. If the expected growth did not hit the 3.5 percent threshold then the small incremental reductions in taxes would have been deferred until the growth was reached. This legislation is a prudent and safe way to implement tax reductions. Many of the opponents of the bill kept using this year’s budget shortfall as political rhetoric to oppose the bill. However, as I previously explained, the tax relief would be future tax reductions that depend entirely upon the General Fund revenues growing at least 3.5 percent a year, which would include the expected reduction in revenue. So if a bill similar to LB 461 had been passed last year, it would not have made balancing the state’s budget this year any more difficult, since the tax relief would not have been triggered this year.
Each budget bill was advanced to Final Reading last week. Senator Steve Erdman introduced an amendment to the main budget bill, LB 327, which would have kept spending at fiscal year 2016-17 levels except for added increases in salaries for state employees and health insurance packages that have already been negotiated with the unions. I supported that amendment as it would have further restrained spending and would prevent the Legislature from needing to call a special session later in the year, as yet might happen with the further decreases in state revenue expected in 2018. I am concerned that the Legislature is drawing too much money from the cash reserve fund and not cutting spending further, which is why I voted no in advancing the budget bills.
On Thursday the Legislature debated LB 44, also known as the Remote Seller Sales Tax Collection Act. This legislation would have required remoted sellers, which are online sellers with no physical presence in our state, to collect and remit sales tax if their gross revenue in Nebraska exceeded $100,000 or their sales in Nebraska consist of 200 or more separate transactions. I believe we need to wait for pending federal court cases which will be deciding the constitutionality of states’ authority to require the collection and remitting of the online sales tax. I and many other senators did not support this bill, and it failed to receive the necessary 33 votes to overcome a filibuster.
The Legislature also advanced LB 289 to Final Reading last week. I have discussed this important bill in a previous column. In short, it will impose harsher penalties on sex traffickers and on those who solicit victims of sex trafficking. It will also allow victims of sexual assault to terminate the parental rights of their attacker if a child results from the sexual assault.
Please contact me, or our staff with questions or concerns at (402) 471-2728 or by email at firstname.lastname@example.org; or stop by Room 1022 if you are in the State Capitol. If you would like to follow the Legislature online please visit http://netnebraska.org/basic-page/television/live-demand-state-government. Live broadcasting is also available on NET2.